TUMI, INC. v. EXCEL CORP.

August 1, 2005.

Tumi, Inc.
v.
Excel Corp., et al.

The opinion of the court was delivered by: WILLIAM J. MARTINI, District Judge

LETTER OPINION

Dear Counsel:

This matter comes before the Court on Defendant
Excelcorp's*fn1 motion to dismiss Plaintiff's Complaint
pursuant to Federal Rule of Civil Procedure 12(b)(6). There was
no oral argument. Fed.R.Civ.P. 78. For the reasons set forth
below, the motion is GRANTED IN PART and DENIED IN PART.
Accordingly, Count Five is DISMISSED WITHOUT PREJUDICE.

BACKGROUND

This action, before this Court on allegations of diversity
jurisdiction under 28 U.S.C. § 1332, was commenced on or about
January 24, 2005 by Plaintiff Tumi, Inc. ("Tumi"), a New Jersey
corporation with its principal place of business in New Jersey,
against Excelcorp, a Nevada corporation with its principal place
of business in Nevada. (See Compl. ¶¶ 1-4.) It is also brought against unnamed Defendants John Does 1-20, Jane Roes
1-20, and ABC COS. 1-20 (referred to collectively herein as
"unnamed Defendants"). (See id. ¶¶ 5-7.) The action arises out
of Excelcorp's purported breach of a contract with Tumi
concerning Excelcorp's participation in Tumi's so-called "Special
Markets Program." (See generally id. ¶¶ 1-19.) The following
are the relevant allegations.

Tumi's business consists of manufacturing and distributing
globally recognized "luggage, leather goods, business cases,
personal leather goods, women's products and related executive
accessories" marketed under its name. (See id. ¶ 8.) It
distributes and sells its merchandise primarily through high-end
department stores, luggage speciality stores, Tumi-owned stores,
dealer-operated Tumi stores, and Tumi shops located in or at
other retail establishments. (See id. ¶ 9.) However, Tumi also
markets and sells its products through entities participating in
its "Special Markets Program," under which program participants
may sell Tumi products to corporations or other groups for their
"internal use"  that is, participating entities may not simply
resell the Tumi products on the market. (See id. ¶¶ 10-11.) Not
surprisingly, Tumi engraves its products and traces their
circulation in commerce pursuant to its so-called "Tumi Tracer
Program." (See id. ¶ 12.)

On or about March 25, 2004, Excelcorp executed and delivered to
Tumi a "Special Markets Memo" detailing the terms and conditions
of its participation in Tumi's Special Markets Program. (See
id. ¶¶ 15-16.) Under the terms of the Special Markets Memo,
Excelcorp was prohibited from selling or trans-shipping Tumi
merchandise received under the Special Markets Program to groups
of end-users other than those approved by Tumi. (See id. ¶ 15.)
The Special Markets Memo, as delivered to Excelcorp, also
provided that Tumi would be entitled to certain liquidated
damages and could immediately terminate the agreement if
Excelcorp sold or trans-shipped Tumi products to unauthorized
end-users. (See id.) However, allegedly unbeknownst to Tumi,
Excelcorp altered the terms of the Memo upon execution such that,
counter to the Memo's original terms: (1) Excelcorp would not
be liable to Tumi for liquidated damages; and (2) Tumi would
not have the right to immediately terminate the premium account
arrangement if Excelcorp sold or trans-shipped Tumi products to
unauthorized end-users. (See id. ¶ 16.)

A few months later, between August and October 2004, Tumi,
oblivious to Excelcorp's changes to the Memo, sold $100,000 worth
of products to Excelcorp. (See id. ¶ 17.) Sometime thereafter,
Tumi learned (by means of the Tumi Tracer Program) that products
obtained by Excelcorp under the Special Markets Program and
pursuant to Excelcorp's Special Markets Memo were being offered
for sale by Costco-Japan, an unauthorized dealer. (See id. ¶
18.) Tumi also learned that Tumi products obtained by Excelcorp
from unnamed Defendants were being offered for sale by
Costco-Japan. (See id. ¶ 19.) This not only violated the terms
of Excelorp's and the unnamed Defendants' participation in the
Special Markets Program (see id. ¶¶ 22, 41), it also allegedly
interfered with Tumi's agreements with certain Japanese
businesses regarding the distribution of Tumi products in Japan
(see id. ¶ 26). Specifically, throughout the relevant time
period, Tumi had an on-going joint venture agreement ("Japan
Agreement") with two Japanese corporations  Ace Co., Ltd.
("Ace") and Itochu Co. ("Itochu")  for the distribution and sale
of Tumi merchandise in Japan. (See id. ¶ 13.) These agreements
made Itochu the exclusive importer and Tumi Japan the exclusive
distributor of Tumi products in Japan. (See id. ¶ 14.) Excelcorp allegedly sold its Tumi products to Costco-Japan
knowing that Tumi "had an exclusive arrangement for [the] sale
and distribution of its products in Japan." (See Id. ¶ 28.)

Based on these allegations, Tumi asserts four state law causes
of action for breach of contract, tortious interference with
contract, fraudulent misrepresentation, and conspiracy. (See
id. ¶¶ 20-42.) It seeks damages, costs, attorneys' fees, and
injunctive relief. (See id. ¶¶ 24, 31, 37, 39, 42.) Excelcorp
now moves to dismiss the Complaint in its entirety. (See
generally Memorandum of Law in Support of Defendant Excelcorp's
Motion to Dismiss Plaintiff Tumi, Inc.'s Complaint Pursuant to
Fed.R.Civ.P. 12(b)(6) [hereinafter "Def.'s Mem."].)

ANALYSIS

I. Standard of Review

In deciding a motion to dismiss under Rule 12(b)(6), all
allegations in the complaint must be taken as true and viewed in
the light most favorable to the plaintiff. See Warth v. Seldin,
422 U.S. 490, 501 (1975). A court may dismiss a complaint for
failure to state a claim only if, after viewing the allegations
in the complaint in the light most favorable to the plaintiff, it
appears beyond doubt that no relief could be granted "under any
set of facts which could prove consistent with the allegations."
Hishon v. King & Spalding, 467 U.S. 69, 73 (1984); Zynn v.
O'Donnell, 688 F.2d 940, 941 (3d Cir. 1982).

Because Excelcorp raised in its reply papers numerous
(meritless) arguments for dismissal not raised in its original
moving papers, the Court notes that these arguments are
inappropriate for consideration on adjudication of this motion.
See, e.g., Solid Waste Transfer and Recycling, Inc. v. County of
Essex, No. 98-2990, 1999 U.S. Dist. LEXIS 17867, at *40 (D.N.J.
Oct. 26, 1999) (declining to consider new arguments raised
initially on reply); Schiffli Embroidery Workers Pension Fund v.
Ryan, Beck & Co., 869 F. Supp. 278, 281 (D.N.J. 1994) (same,
"for the obvious reason that the opponent has no opportunity to
respond"). In addition, the Court will not consider the affidavit
accompanying Defendant's reply papers, as, given the nature of
the asserted bases for dismissal, it has no bearing on the
Court's review of the ...

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